Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Deutsche Bank: Retail Sales - January 2000

Data Flash (New Zealand)
Retail Sales - January 2000

Key Points

Retail sales (nominal, s.a.) fell by 0.5% in January, following a 1.2% increase in December. Average market expectations had been for zero change.

Sales were 5.2% higher than in January 1999, compared to an annual rate of increase of 8.3% recorded for December.

It is evident in the data that the December/January volatility can largely be explained by Y2K influences. Households were stocking up on food, petrol, medications in December, followed by an unwinding of this effect in January. The pattern in our measure of non-durables sales confirms that interpretation (see chart).

The Y2K effect added to the usual volatility in the retail series, leading Statistics NZ to note its seasonal adjustments may not be accurate in this case. That suggests two things: - Not too much should be read into the comparatively weak result for January. - Secondly, potentially significant revisions should be expected for the December/January period.

It has been our interpretation that, given the pattern of a strong December quarter (which followed a record rise in Q3), Q1 should be seen as a period of consolidation at a high level of economic activity. Today's retail figures and other indicators over recent months have been consistent with that interpretation. That suggests that comparatively weak figures will be a temporary phenomenon, with the medium-term growth outlook remaining very favourable on the back of a competitive NZD, strengthening world growth and improving terms of trade.

As far as nominal retail sales are concerned, strong household income growth - due to growing employment, rising wage inflation and a bounce-back in farm incomes - should generate trend growth of 4-5% over the next year. Current levels of consumer confidence are consistent with that outlook, with the upturn in growth rates for durables (see chart) confirming positive household sentiment.

Today's data will not affect the RBNZ's decision on 15 March. We expect a 50 bps rise in the cash rate and a hawkish Monetary Policy Statement that hints at an aggressive tightening profile until early 2001.

Ulf Schoefisch, Chief Economist

This, along with an extensive range of other publications, is available on our web site

In order to read our research you will require the Adobe Acrobat Reader which can be obtained from their website for free.

© Scoop Media

Business Headlines | Sci-Tech Headlines


Media Mega Merger: StuffMe Hearing Argues Over Moveable Feast

New Zealand's two largest news publishers are appealing against the Commerce Commission's rejection of the proposal to merge their operations. More>>


Approval: Northern Corridor Decision Released

The approval gives the green light to construction of the last link of Auckland’s Western Ring Route, providing an alternative route from South Auckland to the North Shore. More>>


Crown Accounts: $4.1 Billion Surplus

The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says. More>>


Mycoplasma Bovis: One New Property Tests Positive

The newly identified property... was already under a Restricted Place notice under the Biosecurity Act. More>>

Accounting Scandal: Suspension Of Fuji Xerox From All-Of-Government Contract

General Manager of New Zealand Government Procurement John Ivil says, “FXNZ has been formally suspended from the Print Technology and Associated Services (PTAS) contract and terminated from the Office Supplies contract.” More>>